Asheesh Birla, Senior VP of Product at Ripple, published the results of the first xRapid pilot today. He spoke about how this move was in line with Ripple’s vision for the Internet of Value. xRapid is an important step in realizing the goal of improving the speed and cost of cross-border payments, which could provide ‘trillions’ to the global economy.
xRapid utilizes the XRP token to act as a bridge currency to make cross-border payments instantaneous through the Ripple blockchain. The efficiency of xRapid is seen in the aggregated results of the several pilots conducted for xRapid.
For payments in a so-called ‘critical remittance corridor’ between the United States and Mexico, financial institutions that utilized the xRapid solution saw a savings of 40-70% compared to what they normally pay ForEx brokers. The average xRapid payment took over two minutes, which is leaps and bounds faster than what we see today, which, on an average, is around two to three days.
Birla explained the speedy transaction speed, saying:
“The portion of the transfer that relies on the XRP Ledger takes two to three seconds, with the additional processing time attributed to movement across the intermediary digital asset exchanges and local payment rails.”
He then goes on to explain how exactly xRapid functions. It has three stages, with a financial institution connecting directly to the digital asset exchanges in the originating and destination corridors. The currency from the originating corridor is liquidated into XRP, which is then exchanged into the destination currency on the destination side. After this transaction, the funds are ‘sent out on the local rails of the destination country for payout’. The transaction also features end-to-end tracking, resulting in a cheaper and faster cross-border payment.
He ends by saying:
“This is the realization of the vision for an Internet of Value — allowing for a new fluid movement of money that will benefit the entire global economy, from families that rely on remittance payments, to corporations looking to expand and scale into markets in new countries.”
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